Microsoft heads in a worrying direction

The big question they try and get the assembled Steves to answer is whether Steve 2 (Stephen Elop) is in line to replace Steve 1 as Microsoft CEO. It’s fairly clear that this has been on the cards for some time. However, if it were to happen, it would be a disastrous move for Microsoft. Let me explain why.

When Stephen Elop was at Microsoft previously, he did a pretty good job. Heading the business division he guided them through a major product refresh and brought in a significant profit to the division, which is Microsoft’s engine room. He brought competence to the role.

What should worry Microsoft investors is Elop’s performance at Nokia. In Microsoft’s Business Division he took an already well functioning, profitable unit and maintained the status quo. When he joined Nokia it was a business in turmoil. A business under threat. A business that had seen it’s previous business model utterly destroyed by its competitors.

I, and others, would argue that the Microsoft he would inherit as CEO would be more similar to Nokia in his time there rather than Microsoft. Therefore, one has to look at his decisions when in that position. Elop’s now famous “burning platform” speech and decision to move to Windows Phone was a bold but flawed decision. It might turn out that Windows Phone becomes competitive in the smart phone market, but it’s certainly not today. And frankly, if Elop’s tenure at Nokia had been truly successful, would they even be a target for Microsoft at all? Probably not.

But quite apart from Elop’s performance at Nokia the greater risk is that he is an inside man. This is someone who is already indoctrinated in the ways of Microsoft. What they need is a fresh face, with a fresh view on the company and the market. Elop is incapable of providing that.

Microsoft, having made a terrible decision in its Ballmer appointment, can’t afford to make the same mistake again. This is high stakes stuff.

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